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Oil Slumps 3% as Trump's Tariffs Expected to Impede Demand

FILE PHOTO: An oil and gas industry worker walks during operations of a drilling rig at Zhetybay field in the Mangystau region, Kazakhstan, November 13, 2023. REUTERS/Turar Kazangapov/File Photo
FILE PHOTO: An oil and gas industry worker walks during operations of a drilling rig at Zhetybay field in the Mangystau region, Kazakhstan, November 13, 2023. REUTERS/Turar Kazangapov/File Photo
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Oil Slumps 3% as Trump's Tariffs Expected to Impede Demand

FILE PHOTO: An oil and gas industry worker walks during operations of a drilling rig at Zhetybay field in the Mangystau region, Kazakhstan, November 13, 2023. REUTERS/Turar Kazangapov/File Photo
FILE PHOTO: An oil and gas industry worker walks during operations of a drilling rig at Zhetybay field in the Mangystau region, Kazakhstan, November 13, 2023. REUTERS/Turar Kazangapov/File Photo

Oil prices fell by over 3% on Thursday after US President Donald Trump announced sweeping new tariffs which investors worry will enflame a global trade war that will curtail economic growth and limit fuel demand.

Brent futures were down $2.66, or 3.55%, to $72.29 a barrel by 0918 GMT US West Texas Intermediate crude futures were down $2.69, or 3.75%, to $69.02.

Trump on Wednesday unveiled a 10% minimum tariff on most goods imported to the United States, the world's biggest oil consumer, with much higher duties on products from dozens of countries, initiating a global trade war that threatens to drive up inflation and stall US and worldwide economic growth, Reuters reported.

"The US tariff announcement clearly caught markets off guard. Pre-announcement speculation suggested a flat 15-20% tariff, but the final decision was more hawkish," Yeap Jun Rong, market strategist at IG, said in an email.

"For oil prices, the focus now shifts to the global growth outlook, which is likely to be revised downward due to these higher-than-expected tariffs," he added.

Imports of oil, gas and refined products were exempted from the new tariffs, the White House said on Wednesday.

UBS analysts on Wednesday cut their oil forecasts by $3 per barrel over 2025-26 to $72 per barrel, citing weaker fundamentals.

Traders and analysts now expect more price volatility in the near term, as the tariffs may change as countries try to negotiate lower rates or impose retaliatory levies.

"Countermeasures are imminent and judging by the initial market reaction, recession and stagflation have become terrifying possibilities," said PVM analyst Tamas Varga.

"As tariffs are ultimately paid for by domestic consumers and businesses, their cost will inevitably increase impeding the rise in economic wealth."

In other news, US Energy Information Administration data on Wednesday showed US crude inventories rose by a surprisingly large 6.2 million barrels last week, against analysts' forecasts for a decline of 2.1 million barrels.

Market participants are also awaiting the outcome of an OPEC+ meeting on Thursday, which will discuss Kazakh output.

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UAE Bank Stocks Jump after Central Bank Launches Resilience Package

A man on a boat with an UAE flag near Dubai Creek, in Dubai, United Arab Emirates, March 5, 2026. Picture taken with a mobile phone. REUTERS/Rula Rouhana
A man on a boat with an UAE flag near Dubai Creek, in Dubai, United Arab Emirates, March 5, 2026. Picture taken with a mobile phone. REUTERS/Rula Rouhana
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UAE Bank Stocks Jump after Central Bank Launches Resilience Package

A man on a boat with an UAE flag near Dubai Creek, in Dubai, United Arab Emirates, March 5, 2026. Picture taken with a mobile phone. REUTERS/Rula Rouhana
A man on a boat with an UAE flag near Dubai Creek, in Dubai, United Arab Emirates, March 5, 2026. Picture taken with a mobile phone. REUTERS/Rula Rouhana

The United Arab Emirates central bank (CBUAE) on Tuesday unveiled a package to help bolster banks' liquidity, marking its most significant policy move since the pandemic, as Gulf economies move to weather the impact of the Iran crisis.

UAE banks, whose stocks have seen double-digit losses since the war began last month, jumped on Wednesday morning, with Dubai's Emirates NBD and Abu Dhabi Islamic Bank gaining over 6%, and Abu Dhabi Commercial Bank up over 5%.

First Abu Dhabi Bank was losing around 1% by 0825 GMT.

The war, now in its third week and without tan end in sight, has thrown global energy markets and transport into chaos as the conflict has spread.

The UAE's financial system "has demonstrated resilience during the current extraordinary circumstances affecting the global and regional markets without any material impact on the banking sector's health and payment systems," the CBUAE board said in a statement.

Under the package approved on Tuesday, banks will gain enhanced access to ⁠reserve balances of up to 30% of the cash reserve requirement and term liquidity facilities in both UAE dirhams and US dollars, the CBUAE said.

Other measures include stopgap relief in liquidity and stable funding ratios as well as the temporary release of the countercyclical capital buffer (CCyB) and capital conservation buffer (CCB), it said.

While the measures introduced on Tuesday are larger than a similar package introduced to withstand the impact of the COVID-19 pandemic, "asset quality pressures could still emerge should the conflict persist and its economic effects deepen," the bank said.

Gulf banks could face domestic deposit outflows of $307 billion if the Middle East conflict deepens, S&P Global Ratings said in a report on Monday. The ratings agency said, however, that it had seen no evidence of major outflows of foreign or local funding from banks.

The CBUAE said in Tuesday's statement that the overall stock of liquidity held by UAE banks at the regulator, combined with their net eligible assets for central bank operations, had reached close to $250 billion, of which banks' reserve balances exceed $109 billion.

Business

About 90 Ships Cross the Strait of Hormuz Despite the War

Indian vessel 'Nanda Devi' carrying liquefied petroleum gas (LPG) arrives at Vadinar Port in the Jamnagar district of Gujarat state on March 17, 2026 after Iran allowed it to pass through the Strait of Hormuz. (Photo by AFP)
Indian vessel 'Nanda Devi' carrying liquefied petroleum gas (LPG) arrives at Vadinar Port in the Jamnagar district of Gujarat state on March 17, 2026 after Iran allowed it to pass through the Strait of Hormuz. (Photo by AFP)
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About 90 Ships Cross the Strait of Hormuz Despite the War

Indian vessel 'Nanda Devi' carrying liquefied petroleum gas (LPG) arrives at Vadinar Port in the Jamnagar district of Gujarat state on March 17, 2026 after Iran allowed it to pass through the Strait of Hormuz. (Photo by AFP)
Indian vessel 'Nanda Devi' carrying liquefied petroleum gas (LPG) arrives at Vadinar Port in the Jamnagar district of Gujarat state on March 17, 2026 after Iran allowed it to pass through the Strait of Hormuz. (Photo by AFP)

About 90 ships including oil tankers have crossed the Strait of Hormuz since the outset of the war with Iran and it is still exporting millions of barrels of oil at a time when the waterway has been effectively closed, according to maritime and trade data platforms.

Many of the vessels that passed through the strait were so-called “dark” transits evading Western government sanctions and oversight that likely have ties to Iran, maritime data firm Lloyd’s List Intelligence said. More recently, vessels with ties to India and Pakistan have also successfully crossed the strait as governments stepped up negotiations.

As crude prices spiked above $100 a barrel, US President Donald Trump pressured allies and trade partners to send warships and reopen the strait, hoping to bring oil prices lower.

Most shipping traffic through the Strait of Hormuz, a waterway for global oil and gas transport that supplies roughly one-fifth of the world’s crude oil, has been halted since early March, after the war started. About 20 vessels have been attacked in the area.

However, Iran has still managed to export well above 16 million barrels of oil since the beginning of March, trade data and analytics platform Kpler estimated. Due to Western sanctions and associated risks, China has been the biggest buyer of Iranian oil.

There has been “continued resilience” in Iran's oil export volumes, said Kpler trade risk analyst Ana Subasic.

Iran has managed to profit from oil sales and also “preserve its own export artery” by using control over the chokepoint, said Kun Cao, client director at consulting firm Reddal.

Iran's oil export data estimates are largely aligned with maritime traffic data.

At least 89 ships crossed the Strait of Hormuz between March 1 and 15 – including 16 oil tankers, according to Lloyd’s List Intelligence, down from roughly 100 to 135 vessel passages per day before the war, The Associated Press reported. More than one-fifth of the 89 vessels were believed to be Iran-affiliated, while Chinese and Greece affiliated ships are among the rest, it said.

Other vessels also have been getting through.

The Pakistan-flagged crude oil tanker Karachi, controlled by the Pakistan National Shipping Corp., passed through the strait on Sunday, Lloyd’s List Intelligence said.

Shariq Amin, a spokesman at the Pakistan Port Trust, refused to confirm or deny which route the MT Karachi had used but he said the ship would soon safely reach Pakistan.

The India-flagged liquefied petroleum gas (LPG) carriers Shivalik and Nanda Devi, both owned by state-owned Shipping Corp. of India, also traveled through the strait around March 13 or 14, according to Lloyd’s List Intelligence. LPG is used as a primary cooking fuel by millions of Indian households.

India’s foreign minister, Subrahmanyam Jaishankar, told the Financial Times the two vessels’ were able to pass following talks with Iran. Iraq was also in talks with Iran to allow Iraqi oil tankers through the Strait of Hormuz, its state-run news agency reported.

Vessels may be transiting “with at least some level of diplomatic intervention,” said Richard Meade, editor-in-chief of Lloyd’s List. So, Iran may have “effectively created a safe corridor” with some ships passing close to the Iranian coast.

Some vessels near or in the strait were found to have declared themselves as China-linked or with all Chinese crew to reduce risks of being attacked, based on an earlier analysis on ship tracking platform MarineTraffic. Analysts believe they were taking advantage of China’s closer ties with Iran.

Oil prices have jumped more than 40% to above $100 per barrel since the Iran war began, and Iran has threatened it won't allow “even a single liter of oil” destined for the US, and Israel and their allies to pass through.

Business

South Korea Says it Secures Priority UAE Crude

FILE PHOTO: A board shows oil prices as cars wait in a line at a gas station in Seoul, South Korea, March 9, 2026. REUTERS/Kim Hong-Ji/File Photo
FILE PHOTO: A board shows oil prices as cars wait in a line at a gas station in Seoul, South Korea, March 9, 2026. REUTERS/Kim Hong-Ji/File Photo
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South Korea Says it Secures Priority UAE Crude

FILE PHOTO: A board shows oil prices as cars wait in a line at a gas station in Seoul, South Korea, March 9, 2026. REUTERS/Kim Hong-Ji/File Photo
FILE PHOTO: A board shows oil prices as cars wait in a line at a gas station in Seoul, South Korea, March 9, 2026. REUTERS/Kim Hong-Ji/File Photo

South Korea has secured a pledge from the United Arab Emirates to supply 24 million barrels of crude oil, its presidential office said on Wednesday, as authorities roll out measures to cushion the economy from fallout from the Middle East conflict.

Kang Hoon-sik, President Lee Jae Myung's chief of staff, told a briefing at the Blue House that the UAE had said it would give South Korea - the world's fourth-biggest oil importer - top priority for crude supplies.

"They clearly promised that there would be no country that receives oil ahead of South Korea, and that Korea would be number one priority in crude oil supply," Kang said, after returning from the UAE.

However, while ⁠he confirmed plans ⁠to urgently import 18 million barrels, Kang gave no time frame for their delivery and no details on potential shipping routes that would avoid the Strait of Hormuz, Reuters reported.

Iran's effective closure of the strait has forced the UAE to shut in production, cutting its oil output by more than half, while loadings at its Fujairah terminal have been disrupted by drone attacks.

Two supertankers carrying a total of 4 million barrels of Abu Dhabi's Murban crude that loaded at Fujairah are ⁠due to arrive in South Korea on March 29 and April 1, Kpler data shows.

The last cargo of naphtha loaded on February 20 and offloaded in South Korea on March 14, according to Kpler data.

Total emergency imports from the UAE would reach 24 million barrels, Kang said. Deliveries would be made on three UAE-flagged vessels and six South Korean-flagged ships.

South Korea imports almost all of its energy, with about 70% of its crude oil shipments and 20% of liquefied natural gas typically sourced from the Middle East, according to Korea International Trade Association data.

It is also a big importer of naphtha, which is broken down into petrochemicals used in plastics for automobiles, electronics, clothing and construction.

The emergency ⁠supply agreement comes as ⁠South Korea moves to shield companies and consumers from surging energy costs triggered by the Middle East crisis.

Finance Minister Koo Yun-cheol said earlier on Wednesday the country will limit naphtha exports and temporarily designate the feedstock as a supply-chain economic security item.

The government will boost financial support for affected petrochemical companies by 1.5 trillion won ($1.01 billion), including for the cost of alternative imports and preferential interest rates for firms handling high-risk economic security items, Koo said.

President Lee said on Tuesday the government should draw up contingency plans to restrict vehicle use on designated days if the Middle East crisis drags on.

The government has also imposed the country's first fuel price cap in nearly 30 years.

To ease reliance on oil and LNG, Asia's fourth-largest economy on Monday lifted caps on coal-fired power generation and moved to raise nuclear reactor utilization to around 80%.